The U.S. economy added 147,000 jobs in June, surpassing expectations and showing a stable labor market amid ongoing economic uncertainty linked to President Donald Trump’s policies. The Department of Labor released these figures on Thursday, a day earlier than usual due to the upcoming Independence Day holiday. The unemployment rate dipped slightly from May, down to 4.1 percent.
The report highlighted that government jobs at the state and local levels saw the most significant gains, adding 73,000 positions. State governments contributed 47,000 of those jobs, primarily in education, while local governments added 23,000. However, the federal government continued to see losses, shedding 7,000 jobs and totaling 69,000 job losses since January.
Healthcare also showed growth, with the sector adding 39,000 jobs, and social assistance employment increasing by 19,000. Despite these positive numbers, some economists expressed caution. Sarah House, a senior economist at Wells Fargo, noted that while the report seemed good on the surface, deeper analysis revealed underlying issues.
Many sectors in the private industry, including construction, retail, and financial services, remained stagnant in hiring. This hesitance is largely attributed to uncertainty stemming from Trump’s fluctuating tariff policies, which have left businesses confused about making hiring and investment decisions.
While layoffs have begun, they remain relatively low. The Labor Department reported a decrease in jobless claims, down by 4,000 to 233,000. However, the ADP private payroll report indicated a net loss of 33,000 jobs in June, highlighting a trend of hesitance in hiring and reluctance to replace departing workers.
Wage growth also fell short of expectations, with average hourly wages rising by only 0.2 percent from May and 3.7 percent year-on-year. This annual increase is approaching the 3.5 percent target that aligns with the Federal Reserve’s inflation goal of 2 percent.
Despite the White House’s optimistic take on the job growth, the overall job market has cooled significantly over the past year. This year, employers have added an average of 130,000 jobs per month, a sharp decline from the average of 186,000 in 2024 and 400,000 from 2021 to 2023 as the economy rebounded from the COVID-19 pandemic.
Recent data also indicated a contraction in the economy, with a report showing a 0.5 percent shrinkage in the first quarter. The labor force saw a decline of 130,000 last month, following a drop of 625,000 in May. This trend may be influenced by fears surrounding immigration policies, causing some foreign workers to exit the labor market.
Wells Fargo anticipates that job growth may fall below 100,000 in the latter half of the year, citing ongoing policy uncertainty as a significant factor.